The FairTax in the News
Companies to Lever Up – The
Go ahead and pull out an income statement for your
favorite stock. I'll wait.
You'll notice that there is a line called "Interest
Expense" that comes before the "Tax Expense" line. Now notice
the absence of similar lines for "Dividend Expense" and "Share
No, I'm not trying to bore you with an accounting lecture.
I'm trying to point out a travesty of modern finance: the unequal treatment of debt and
equity, better known as the tax-deductibility of interest.
Thanks to interest deductibility, our tax code unfairly
benefits companies that lever themselves to the moon -- e.g., big banks --
while putting those who choose equity financing -- like Apple --
at a comparative disadvantage…
I think a more comprehensive solution is in order. And that
solution is moving to a consumption-tax-based system like the FairTax.
Under the FairTax, the corporate income tax, dividend tax, capital
gains tax, payroll taxes, and individual income taxes (including any taxes
on interest) would be completely eliminated. Instead, a national sales tax
of 23% would be levied on all new goods and services. An "advanced
refund" mechanism would also be put in place to ensure that the tax does
not hurt those below the poverty line. I'm not the best one to explain the
details, so I recommend checking out the FairTax website.
If nothing is taxed besides sales, there can be no perverse
tax incentives to lever or delever. Debt and equity are truly on an equal
footing, as they should be.
FairTax - The
By now we’ve all heard a presidential’s candidate comments
around redistribution of the wealth and 47 percent of Americans not paying
These comments highlight, yet again, that our income tax
system is broken and our nation is suffering, most especially young Americans
ages 18-29. In fact, 1.7 million of these young people have been jobless for
the past year. This is the highest unemployment rate for that age group since
World War II. It is a generation in danger of becoming the “lost generation.”
The FairTax is the solution. The FairTax is a comprehensive
plan to replace federal income and payroll taxes with a consumption tax on new
goods and services. While permitting no exemptions or exceptions, the FairTax
provides a monthly, universal “prebate” or rebate, that ensures each household
may consume tax-free up to the poverty level, thereby making the FairTax
- E. M. Mosiman, Topeka
The October FairTax Webinar
With Special Topic: States with Sales Tax & No Income Tax: How They Compare
When: Thursday, September 25, 2012
Time: 8 pm Eastern, 7 pm Central, 6 pm Mountain, 5 pm Pacific
Where: At your personal computer, anywhere!
Why: To provide an interactive forum for people who cannot get to local meetings to learn about the FairTax and to present special topics that are frequently misunderstood or not generally discussed.
Who: Join Marc Manieri, webinar producer and host from Orlando, Florida. In their fourth year, Marc’s webinars draw national participation from seasoned FairTax supporters as well as those just getting introduced to the FairTax.
Join: To participate, register here and watch for the confirmation email. For more information contact Larry Walters at firstname.lastname@example.org.